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Ionis Pharmaceuticals to Acquire Remaining Stake in Akcea

Ionis Pharmaceuticals plans to acquire the remaining stake in Akcea Therapeutics that it does not already own for approximately $500 million cash.

The Carlsbad business announced its decision to make the tender offer on Aug. 31.

Ionis, a specialist in RNA-targeted therapies, already owns 76% of Akcea.

The Carlsbad business is offering $18.15 per share — a 59% premium over Akcea’s Aug. 28 closing price of $11.38.

Seeking Efficiencies

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“This acquisition is another step forward in Ionis’ evolution and creates a stronger, more efficient organization to the benefit of all stakeholders,” Ionis CEO Brett Monia said in a statement distributed by the company.

“We believe becoming one company — with one vision and one set of strategic priorities, led by one team — will deliver significant strategic value, enhancing the future success of our company, accelerating our next phase of growth and positioning us to most effectively deliver our medicines to patients. Following the completion of the transaction, Ionis will retain more value from Akcea’s rich pipeline and commercial products, further strengthening our financial position and supporting continued investments in our future.”

Ionis specializes in RNA-targeted drugs. The business has created an efficient, broadly applicable drug discovery platform called antisense technology. According to company materials, antisense technology can treat diseases where no other therapeutic approaches have proven effective.

The business collects license revenue from spinraza, a drug for spinal muscular atrophy, a debilitating muscle disease. Worldwide sales of the drug amounted to $495 million during the second quarter of 2020.

Akcea Spun Out in 2014

Akcea is based in Boston and has 15 employees in San Diego County.

Ionis formed Akcea as a wholly owned subsidiary to complete development of and commercialize Ionis’ medicines to treat lipid disorders. The business was spun out in 2014, began operations in 2015 and had its initial public offering in 2017.

In September 2019, Akcea announced that CEO Paula Soteropoulos had left the company, as did two other high-level executives. At the time, the company issued a statement saying its senior leadership transition was designed to strengthen the company’s opportunity to advance promising therapies and build on its global presence. Damien McDevitt is currently Akcea’s CEO.

Akcea has been taking two drugs — tegsedi and waylivra — to market. Over the last 52 weeks, Akcea stock has traded in the range of $8.00 to $22.79.

If the deal goes through, Ionis will have access to Akcea’s cash on hand — which was approximately $390 million as of June 30.

Goldman Sachs & Co. LLC and Stifel, Nicolaus & Co. Inc. are serving as financial advisers to Ionis, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to Ionis. Cowen is serving as financial adviser to the affiliate transactions committee of Akcea’s board of directors, and Ropes & Gray LLP is serving as legal counsel to the affiliate transactions committee.

Akcea shares traded in the range of $18.15 to $19.65 on Aug. 31, the day the tender offer was announced. As of Sept. 9, they traded in the range of $18.12 to $18.16.

Looking Toward Non-GAAP Profitability

As of June 30, Ionis had $2.3 billion in cash and short-term investments, down from $2.5 billion at the end of 2019.

In other news, Ionis announced quarterly financial results in early August.

In announcing the figures, Ionis said it was on track to achieve financial guidance of being meaningfully profitable this year. The business anticipates net income of $8 million on a non-GAAP basis, and a net loss of $32 million on a GAAP basis. GAAP stands for generally accepted accounting principles.

For the second quarter, the business reported a net loss of $31.8 million, or 23 cents per share, on total revenue of $145.5 million. In the same quarter of 2019, the business reported a net loss of $876,000, or a penny per share, on total revenue of $163.8 million.

Royalty revenue from Ionis’ spinraza product came to $71.7 million in the second quarter, up from $70.5 million in the same quarter of 2019.

The business added product sales from tegsedi to its commercial revenue in the fourth quarter of 2018 and product sales from waylivra to its commercial revenue in the third quarter of 2019. Akcea is commercializing both of the drugs. 

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